Motorists can save as much as 29 cents a gallon -- nearly $6 on a 20-gallon fill-up -- in metropolitan D.C. by shopping around and pumping their own gas.
According to a random survey by The Washington Post of 38 gas stations in metropolitan Washington, the difference between the highest price gas from a full-service station and the lowest price gas from a self-service pump amounts to 27 cents for regular, 29 cents for unleaded regular and 22 cents for premium.
Service station owners cutting prices to attract volume, a widening gap between the cost of self service and full service and differences in state taxes have combined to produce the tremendous disparities, according to area station operators.
"It won't continue, but right now it's a buyer's market," said Vic Rasheed, executive director of the Greater Washington-Maryland Service Station Association.
With oil supplies up, virtually all the major oil companies have offered "competitive discount allowances" of several cents a gallon returned to operators who keep sales volume high. Most allowances are pegged to keeping sales about 75 percent of last year's volume or higher.
But motorists are buying less gasoline, and the resulting reduced profits are making service station operators desperate for extra income. So those discounts have produced sharp price-cutting to attract customers.
"In a lot of cases, stations are pricing at below cost," said Dave Lowery, a station operator and president of the Northern Virginia Gasoline Dealers Association.
Still another factor pushing dealers to slash prices is pressure from the oil companies to get volume up or to close, according to Rasheed. "The dealers are all under the gun," he said. Oil companies are "forcing dealers to compete to see who's going to stay and who's going to go."
With profit margins so slim, the question becomes "whether they're going to be closed by the oil companies or go broke," Rasheed said.
To make up for lower profits from price-cutting, operators who offer full service have raised prices for that, hoping to average profits high enough to keep them in business, Lowery said. The differential between self service and full service has climbed so steeply since spring that in some cases it's almost double.
Comparing an April survey by the American Automobile Association Potomac Division with a Post survey during the last week of September and the first week in October, the average difference between self service and full service in the area has increased from 10.5 cents to 19.2 cents for regular, from 9.1 cents to 13.4 cents for unleaded regular and from 5 cents to 8.9 cents for premium. Stations in The Post survey were selected randomly.
Trends toward increasing differences between self service and full service also are true nationally. A September survey conducted by the Lundberg Letter, a well-regarded petroleum marketing trade publication, found the average differential between full service and self service for regular leaded gasoline was 9.41 cents. "It has been increasing steadily actually all year," said Lynn Beavers, a contributing editor.
Although self-service prices have been falling, full-service prices have risen for the first time since March, Beavers said.
"I try to run at least a 20-cent differential. The cost of that man on the island is just tremendous," Lowery said.
He also said some operators are restoring gasoline-station islands to full service in a bid for higher average profits. "You give the customer who wants to pump a price that brings him in and make the full-service customer pay for it." The self-service price "is your loss leader -- the price on the street."
Regional factors also create huge price variations here. Northern Virginia's stations are the most expensive because of an 11-cent-a-gallon state sales tax -- 2 cents a gallon higher than in Maryland.
Sales tax in the District is 13 cents, but the Northern Virginia tax total ends up higher because station operators also must collect a 2 percent charge dedicated to defraying Metrorail costs.
Such charges in Virginia average another 2.6 to 2.8 cents a gallon for unleaded regular and can add more than 3 cents a gallon to the taxes for premium.
In The Post survey, the average cost of regular gas at a full-service station in Virginia was $1.453 cents compared with an area average of $1.429. At a self-service station, the average Virginia cost for regular was $1.291 compared with an area average of $1.237.
Average Virginia price for unleaded regular at full-service stations was $1.512 versus $1.466 for the area; at self-service pumps it was $1.359 in Virginia compared with an area average of $1.332. Average Virginia price for premium at a full-service station was $1.566 compared with the area's $1.54, and for self service, the Virginia price was $1.47 versus the area's $1.451.